The NHL, which presented a six-year deal earlier this week that proposed an equal split of hockey-related revenue with the players, said the union discussed three different offers on Thursday that all failed to approach a 50-50 split.
"I am concerned, based on the proposal that was made today, that things are not progressing," NHL Commissioner Gary Bettman said. "To the contrary, I view the proposal made by the players' association a step backward."
The proposal offered by the NHL, which is looking to cut the players' share of revenue from the 57 per cent they got under the previous deal that expired a month ago, is contingent on an 82-game regular season starting on November 2.
NHL Players' Association Executive Director Donald Fehr said the first scenario presented by the union would reach a 50-50 split in three years, the second would get to 50-50 by the fifth year, while a third option proposed a 50-50 split immediately, but only if owners honour all current contracts at 100 per cent.
But after meeting with the NHL for several hours in downtown Toronto, Fehr said the league rejected all three scenarios and was willing only to "tweak" the offer it presented earlier this week, according to Fehr.
"I don't know what we will eventually do. I don't know what the owners will eventually do," said Fehr, flanked by several NHL players including Sidney Crosby.
"But if you had been in the room the vibe you would have gotten is 'unless you are prepared to sign with very minor variations, don't bother us.'"
The dispute over how to split the NHL's $3.3 billion revenue pie represents the league's fourth work stoppage in 20 years and first since a 310-day lockout wiped out the 2004-05 season.
The current lockout, which has already cost the league about $250 million in lost revenue after it cancelled the preseason and the October 11-24 block of regular season games, could soon force the NHL to scrap another piece of the schedule.
Bettman, who called the NHL's latest offer a "best shot" deal to offer long-term stability for the league and its 30 franchises, said a signed deal is needed by October 25 to ensure a full season is played.
"We indicated that we are prepared to have discussions, that we are prepared to look for tweaks or adjustments, but this is the deal that we believe this league needs to get the games going," said Bettman.
"But the longer this goes, and particularly if we are not in a position to have an 82-game regular season, damage may in fact make it even more difficult as time goes on to make a deal."